We are updating our estimates to incorporate the strong 9M25 results, the guidance given at the Capital Markets Day (CMD) and the positive impact of conversion of the onshore production to Petroleum Industry Act terms from 2026, partly offset by lowered oil price assumptions. That results in significant increases to our prior forecasts for net profit and dividend, notwithstanding an average cUS$5/bbl reduction in our Brent price forecast through 2027. Seplat continues to trade well below peer average ratings and has given up some of its gains post the CMD despite the sale of Maurel et Prom's 20.7% stake to Heirs at 305p. Our revised corporate level net asset value calculation computes to 463p on a 15% discount rate increasing to 629p on a 10% discount rate, 65% and 124% higher, respectively, than the current share price. At heart, Seplat offers a giant, under-developed, low cost resource base of 2,305m barrels of oil equivalent, rapidly rising production, a conservative balance sheet, and a clear distribution policy promising a minimum current yield of over 5% in a country with improving investment metrics yet it is trading on a discounted valuation.
